Despite fewer employer mandates, GOP health reform is a bad deal

HEALTH SCARE: Republicans want to prohibit the use of tax credits to pay for insurance that covers abortions.

What should New York businesses make of House Republicans’ proposal to replace the Affordable Care Act? One temptation might be to ignore it, given that the attacks on the bill from conservatives and liberals alike suggest it won’t pass in its current form, or any form. But silence is not a good option when national politics are so chaotic. Indeed, despite President Donald Trump’s promise that Obamacare would be immediately replaced, House and Senate leaders last week were scheduling votes to repeal the law before a replacement had enough support to pass. The business community cannot assume Washington won’t screw this up.

New York employers might be inclined to cheer any removal of their mandates to provide health care. That may well be fool’s gold, however. As Kathryn Wylde of the Partnership for New York City points out, our state and local governments are likely to take countermeasures to maintain the health coverage New Yorkers have under Obamacare—without the same funding from Congress to help pay for it all.

Local politicians are not going to let millions of New Yorkers lose Medicaid coverage. Nor will they allow insurance plans that cover less than they must today. New York hospitals, meanwhile, still would be required to serve the uninsured who end up in emergency rooms.

When the bill for uncompensated care comes due, don’t count on the federal government to pick up the tab. As is so often the case, New York politicians would turn to employers to cover the shortfall in the form of higher city and state taxes and new mandates and fees, all of which would make New York a less desirable place to do business.

The American Health Care Act could worsen the imbalance between the taxes New Yorkers send to Washington and the funding we get back. The net outflow from New York is a hefty $56 billion per year. It would surprise no one if the GOP proposal is projected to swell that number, even as it gives wealthy New Yorkers a big tax break.

Obamacare is an imperfect solution to the shortcomings of our employer-based health system. Nonetheless, it has insured millions of people and pushed the industry to deliver better care at lower costs. It can and should be improved upon. Although the GOP bill would leave much of Obamacare’s protections intact, it also would infuse divisive politics into the policy mix, allowing tax credits to be used only for insurance plans that don’t cover abortion. The House Republicans’ proposal is squarely at odds with New York state regulations. New York employers should be concerned if the cure from congressional Republicans is worse than the disease. — THE EDITORS

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